Adidas ‘Own the Game’ Strategy Hinges on Digital Engagement

Need to Know

• Adidas has outlined a five-year growth plan that includes doubling its revenue from e-commerce by 2025.
• The plan, called “Own the Game”, includes investing more than 1 billion euros in digital technology and hiring more than 1,000 “tech and digital talents” by the end of 2021.
• The sportswear giant is aiming for online sales of up to 9 billion euros per year.
• Adidas is following other D2C leaders such as Nike and lululemon in its effort to focus on technology and e-commerce.

Analysis

Sportswear giant Adidas has outlined an ambitious digital investment plan, aiming to double its revenue from direct-to-consumer sales over the next five years.

Adidas’ new five-year growth strategy, called “Own the Game”, will see the brand invest more than 1 billion euros in digital technology and infrastructure, including supply sourcing, advertisement efforts, and 3D design. The company is aiming to hire more than 1,000 new “tech and digital talents” by the end of this year. With these efforts, Adidas hopes to hit online sales of up to 9 billion euros per year, which would comprise 80% of the company’s overall sales growth, targeted at roughly 10% annually.

“‘Own the Game’ is a growth and investment strategy, which will lead Adidas into a successful future. Our strategy is deeply rooted in sport, puts the consumer at the heart of everything we do and is brought to life by our people. Our strategic focus is on increasing credibility of the Adidas brand, elevating the experience for our consumers and pushing the boundaries in sustainability,” Adidas CEO Kasper Rorsted said in a statement. “To successfully execute our strategy, we will continue to significantly invest into our people, our brand and the digital transformation of the company.”

In addition to its investment in digital infrastructure, Adidas announced that it aims for nine out of 10 of its articles to be made from recycled materials by 2025. The company projects that more than 95% of its sales over the next five years will come from its football, outdoor, running, training, and lifestyle categories.

Adidas’ ambitious digital strategy comes after a year in which e-commerce spiked due to the COVID-19 pandemic, not least of all among sports and fitness brands, as at-home fitness and workout plans increased in popularity due to the widespread closure of gyms and athletic centers. In March 2020, Adidas reported a 55% spike in online sales growth; other fitness brands, such as Lululemon, also reported substantial digital growth and expansion in 2020.

Leading the field, however, is Nike, whose robust digital strategy — first outlined in 2018 — has set the stage for the brand set to reach 50% digital penetration by 2022, thanks to its roster of apps and strong digital membership program.